Delaware
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81-0422894
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(State or other jurisdiction of
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(I.R.S. Employer Identification No.)
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incorporation or organization)
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Large accelerated filer
ý
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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(Do not check if a smaller reporting company)
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Page
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Item 1.
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Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2016 and 2015
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Condensed Notes to Consolidated Financial Statements
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Item 2.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 4.
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Controls and Procedures
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OTHER INFORMATION
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Item 1.
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Legal Proceedings
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Item 1A.
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Risk Factors
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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Item 3.
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Defaults Upon Senior Securities
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Item 4.
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Mine Safety Disclosures
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Item 5.
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Other Information
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Item 6.
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Exhibits
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Glossary of Terms
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The following terms or acronyms used in this Quarterly Report on Form 10-Q are defined below:
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Term or Acronym
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Definition
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2018 Notes
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8.125% senior subordinated notes due 2018 issued by Scientific Games Corporation
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2020 Notes
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6.250% senior subordinated notes due 2020 issued by SGI
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2021 Notes
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6.625% senior subordinated notes due 2021 issued by SGI
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ASC
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Accounting Standards Codification
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ASU
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Accounting Standards Update
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Bally
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Bally Technologies, Inc.
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Bally acquisition
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the acquisition of Bally by the Company on November 21, 2014
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Barcrest
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Barcrest Group Limited
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Coin-in
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the amount wagered
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Company
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refers to Scientific Games Corporation and its consolidated subsidiaries, unless otherwise specified or the context otherwise dictates
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CSG
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Beijing CITIC Scientific Games Technology Co., Ltd.
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CSL
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China Sports Lottery
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CSP
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Cooperative Services Program
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D&A
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depreciation and amortization
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ESPP
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employee stock purchase plan
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EU
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European Union
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FASB
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Financial Accounting Standards Board
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GLB
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Beijing Guard Libang Technology Co., Ltd.
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Hellenic Lotteries
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Hellenic Lotteries S.A.
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ITL
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International Terminal Leasing
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LBO
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licensed betting office
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LNS
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Lotterie Nazionali S.r.l.
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Net win
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Coin-in less payouts
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Northstar Illinois
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Northstar Lottery Group, LLC
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Northstar New Jersey
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Northstar New Jersey Lottery Group, LLC
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Note
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refers to a note in the Condensed Notes to our Consolidated Financial Statements in this Quarterly Report on Form 10-Q, unless otherwise indicated
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Participation
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with respect to our Gaming business, refers to gaming machines provided to customers through service or leasing arrangements in which we earn revenues and are paid based on: (1) a percentage of Net win; (2) fixed daily-fees; (3) a percentage of the Coin-in; or (4) a combination of a fixed daily-fee and a percentage of the Coin-in, and with respect to our Lottery business, refers to a contract or arrangement in which we earn revenues and are paid based on a percentage of retail sales
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PMA
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private management agreement
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PTG
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Proprietary table games
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R&D
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research and development
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RCN
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Roberts Communications Network, LLC
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RFP
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Request for proposal
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RMG
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real-money gaming
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RSU
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restricted stock unit
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SEC
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Securities and Exchange Commission
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Secured Notes
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7.00% senior secured notes due 2022 issued by SGI
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Securities Act
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Securities Act of 1933, as amended
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SG&A
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selling, general and administrative
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SGI
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Scientific Games International, Inc., a wholly-owned subsidiary of Scientific Games Corporation
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SHFL
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SHFL entertainment, Inc.
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Shufflers
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various models of automatic card shufflers, deck checkers and roulette chip sorters
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Unsecured Notes
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10.00% senior unsecured notes due 2022 issued by SGI
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U.K.
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United Kingdom of Great Britain and Northern Ireland
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U.S.
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United States of America
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U.S. GAAP
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accounting principles generally accepted in the U.S.
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VLT
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video lottery terminal
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WAP
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wide-area progressive
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WMS
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WMS Industries, Inc.
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WMS acquisition
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the acquisition of WMS by the Company on October 18, 2013
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•
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competition;
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•
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U.S. and international economic and industry conditions, including declines in or slow growth of gross gaming revenues or lottery retail sales, reductions in or constraints on capital spending by gaming or lottery operators and bankruptcies of, or credit risk relating to, customers;
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•
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limited growth from new gaming jurisdictions, slow addition of casinos in existing jurisdictions and declines in the replacement cycle of existing gaming machines;
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•
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ownership changes and consolidation in the casino industry, including by casino operators;
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•
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opposition to legalized gaming or the expansion thereof;
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•
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inability to adapt to, and offer products that keep pace with, evolving technology;
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•
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inability to develop successful gaming concepts and content;
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•
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laws and government regulations, including those relating to gaming licenses and environmental laws;
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•
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inability to identify and capitalize on trends and changes in the gaming, lottery and interactive gaming industries;
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•
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dependence upon key providers in our social gaming business;
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•
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inability to retain or renew, or unfavorable revisions of, existing contracts, and the inability to enter into new contracts;
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•
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level of our indebtedness, higher interest rates, availability or adequacy of cash flows and liquidity to satisfy indebtedness, other obligations or future cash needs;
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•
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inability to reduce or refinance our indebtedness;
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•
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restrictions and covenants in debt agreements, including those that could result in acceleration of the maturity of our indebtedness;
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•
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protection of intellectual property, inability to license third party intellectual property and the intellectual property rights of others;
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•
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security and integrity of our products and systems and reliance on or failures in information technology and other systems;
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•
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natural events that disrupt our operations or those of our customers, suppliers or regulators;
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•
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inability to benefit from, and risks associated with, strategic equity investments and relationships, including (1) the inability of our joint venture to realize the anticipated benefits under its PMA with the Illinois lottery or from the disentanglement services performed in connection with the termination thereof, (2) the inability of our joint venture to meet the net income targets or other requirements under its agreement to provide marketing and sales services to the New Jersey Lottery or otherwise to realize the anticipated benefits under such agreement and (3) the failure to realize the anticipated benefits related to our consortium's instant lottery game concession in Greece;
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•
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failure to achieve the intended benefits of the Bally acquisition, the WMS acquisition, our other recent acquisitions, or future acquisitions, including due to the inability to successfully complete or integrate such acquisitions or realize synergies in the anticipated amounts or within the contemplated time frames or cost expectations, or at all;
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•
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disruption of current plans and operations in connection with our recent acquisitions (including in connection with the integration of Bally and WMS), including departure of key personnel or inability to recruit additional qualified personnel or maintain relationships with customers, suppliers or other third parties;
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•
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incurrence of employee termination or restructuring costs and impairment or asset write-down charges;
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•
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changes in estimates or judgments related to our impairment analysis of goodwill or other intangible assets;
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•
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implementation of complex revenue recognition standards;
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•
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fluctuations in our results due to seasonality and other factors;
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•
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dependence on suppliers and manufacturers;
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•
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risks relating to foreign operations, including fluctuations in foreign currency exchange rates (including those fluctuations related to the affirmative vote in the U.K. to withdraw from the EU), restrictions on the payment of dividends from earnings, restrictions on the import of products and financial instability, including the potential impact to our business resulting from the affirmative vote in the U.K. to withdraw from the EU and the potential impact to our instant lottery game concession or VLT lease arrangements resulting from the recent economic and political conditions in Greece;
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•
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dependence on key employees;
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•
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litigation and other liabilities relating to our business, including litigation and liabilities relating to our contracts and licenses, our products and systems, our employees (including labor disputes), intellectual property and our strategic relationships;
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•
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influence of certain stockholders; and
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•
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stock price volatility.
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Three Months Ended
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Six Months Ended
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June 30,
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June 30,
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2016
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2015
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2016
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2015
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Revenue:
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Services
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$
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363.5
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$
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337.9
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$
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713.8
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$
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668.3
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Product sales
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214.8
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218.1
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412.4
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417.5
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Instant games
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150.9
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135.5
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285.0
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264.4
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Total revenue
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729.2
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691.5
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1,411.2
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1,350.2
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Operating expenses:
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Cost of services
(1)
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101.4
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98.6
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196.3
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189.1
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Cost of product sales
(1)
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100.7
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107.9
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195.1
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205.8
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Cost of instant games
(1)
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74.1
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68.8
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141.1
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|
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135.8
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Selling, general and administrative
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144.9
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140.9
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287.2
|
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286.8
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Research and development
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51.7
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|
48.0
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|
101.5
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94.9
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Employee termination and restructuring
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4.2
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5.2
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6.9
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13.4
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|
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Depreciation and amortization
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|
193.1
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222.2
|
|
|
373.7
|
|
|
406.4
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Operating income (loss)
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59.1
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(0.1
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)
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109.4
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18.0
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Other (expense) income:
|
|
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|
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|
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||||||||
Interest expense
|
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(165.3
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)
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(166.4
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)
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(331.0
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)
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(330.7
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)
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||||
Earnings from equity investments
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8.0
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3.3
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|
11.2
|
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6.4
|
|
||||
Gain on early extinguishment of debt
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|
25.2
|
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—
|
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25.2
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—
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||||
Other income (expense), net
|
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1.7
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(4.3
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)
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2.4
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(9.9
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)
|
||||
Total other expense, net
|
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(130.4
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)
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(167.4
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)
|
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(292.2
|
)
|
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(334.2
|
)
|
||||
Net loss before income taxes
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(71.3
|
)
|
|
(167.5
|
)
|
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(182.8
|
)
|
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(316.2
|
)
|
||||
Income tax benefit
|
|
19.6
|
|
|
65.3
|
|
|
38.8
|
|
|
127.6
|
|
||||
Net loss
|
|
$
|
(51.7
|
)
|
|
$
|
(102.2
|
)
|
|
$
|
(144.0
|
)
|
|
$
|
(188.6
|
)
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation income (loss)
|
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(35.1
|
)
|
|
17.8
|
|
|
(36.7
|
)
|
|
(88.4
|
)
|
||||
Pension and post-retirement gain (loss), net of tax
|
|
0.3
|
|
|
(0.7
|
)
|
|
0.5
|
|
|
0.2
|
|
||||
Derivative financial instruments unrealized gain, net of tax
|
|
4.6
|
|
|
6.0
|
|
|
3.6
|
|
|
1.1
|
|
||||
Other comprehensive (loss) income
|
|
(30.2
|
)
|
|
23.1
|
|
|
(32.6
|
)
|
|
(87.1
|
)
|
||||
Comprehensive loss
|
|
$
|
(81.9
|
)
|
|
$
|
(79.1
|
)
|
|
$
|
(176.6
|
)
|
|
$
|
(275.7
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
$
|
(0.59
|
)
|
|
$
|
(1.19
|
)
|
|
$
|
(1.66
|
)
|
|
$
|
(2.20
|
)
|
Diluted
|
|
$
|
(0.59
|
)
|
|
$
|
(1.19
|
)
|
|
$
|
(1.66
|
)
|
|
$
|
(2.20
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of shares used in per share calculations:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic shares
|
|
87.3
|
|
|
85.9
|
|
|
86.9
|
|
|
85.6
|
|
||||
Diluted shares
|
|
87.3
|
|
|
85.9
|
|
|
86.9
|
|
|
85.6
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
ASSETS
|
(Unaudited)
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
101.4
|
|
|
$
|
128.7
|
|
Restricted cash
|
24.5
|
|
|
20.2
|
|
||
Accounts receivable, net
|
501.3
|
|
|
487.1
|
|
||
Notes receivable, net
|
140.0
|
|
|
167.7
|
|
||
Inventories
|
249.0
|
|
|
248.5
|
|
||
Prepaid expenses, deposits and other current assets
|
120.9
|
|
|
123.3
|
|
||
Total current assets
|
1,137.1
|
|
|
1,175.5
|
|
||
Long-term restricted cash
|
17.4
|
|
|
17.9
|
|
||
Long-term notes receivable, net
|
43.8
|
|
|
51.3
|
|
||
Property and equipment, net
|
695.5
|
|
|
794.0
|
|
||
Goodwill
|
2,992.5
|
|
|
3,013.7
|
|
||
Intangible assets, net
|
1,891.9
|
|
|
1,920.0
|
|
||
Software, net
|
443.2
|
|
|
485.9
|
|
||
Equity investments
|
199.8
|
|
|
228.5
|
|
||
Other assets
|
43.9
|
|
|
45.4
|
|
||
Total assets
|
$
|
7,465.1
|
|
|
$
|
7,732.2
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current portion of long-term debt
|
$
|
49.7
|
|
|
$
|
50.3
|
|
Accounts payable
|
178.6
|
|
|
159.8
|
|
||
Accrued liabilities
|
417.1
|
|
|
443.8
|
|
||
Total current liabilities
|
645.4
|
|
|
653.9
|
|
||
Deferred income taxes
|
173.9
|
|
|
228.2
|
|
||
Other long-term liabilities
|
245.1
|
|
|
188.9
|
|
||
Long-term debt, excluding current portion
|
8,067.6
|
|
|
8,156.7
|
|
||
Total liabilities
|
9,132.0
|
|
|
9,227.7
|
|
||
Commitments and contingencies (see Note 16)
|
|
|
|
|
|
||
Stockholders' deficit:
|
|
|
|
||||
Class A common stock, par value $0.01 per share: 199.3 shares authorized; 104.7 and 103.7 shares issued and 87.5 and 86.5 shares outstanding, respectively
|
1.0
|
|
|
1.0
|
|
||
Additional paid-in capital
|
771.1
|
|
|
765.9
|
|
||
Accumulated loss
|
(2,009.0
|
)
|
|
(1,865.0
|
)
|
||
Treasury stock, at cost, 17.2 shares
|
(175.2
|
)
|
|
(175.2
|
)
|
||
Accumulated other comprehensive loss
|
(254.8
|
)
|
|
(222.2
|
)
|
||
Total stockholders' deficit
|
(1,666.9
|
)
|
|
(1,495.5
|
)
|
||
Total liabilities and stockholders' deficit
|
$
|
7,465.1
|
|
|
$
|
7,732.2
|
|
|
Six Months Ended
|
||||||
|
June 30,
|
||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(144.0
|
)
|
|
$
|
(188.6
|
)
|
Adjustments to reconcile net loss to cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
373.7
|
|
|
406.4
|
|
||
Change in deferred income taxes
|
(57.0
|
)
|
|
(145.7
|
)
|
||
Stock-based compensation
|
12.5
|
|
|
12.1
|
|
||
Non-cash interest expense
|
20.2
|
|
|
19.0
|
|
||
Earnings from equity investments, net
|
(11.2
|
)
|
|
(6.4
|
)
|
||
Distributed earnings from equity investments
|
16.3
|
|
|
19.9
|
|
||
Gain on early extinguishment of debt
|
(25.2
|
)
|
|
—
|
|
||
Changes in current assets and liabilities:
|
|
|
|
||||
Accounts and notes receivable, net
|
14.4
|
|
|
23.7
|
|
||
Inventories
|
(3.4
|
)
|
|
18.4
|
|
||
Other current assets and liabilities
|
15.2
|
|
|
10.8
|
|
||
Accounts payable
|
7.7
|
|
|
(9.4
|
)
|
||
Accrued liabilities
|
(26.1
|
)
|
|
(44.7
|
)
|
||
Other, net
|
(1.2
|
)
|
|
(1.1
|
)
|
||
Net cash provided by operating activities
|
191.9
|
|
|
114.4
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Property and equipment expenditures
|
(8.7
|
)
|
|
(7.8
|
)
|
||
Gaming and lottery operations expenditures
|
(76.8
|
)
|
|
(103.7
|
)
|
||
Intangible assets and software expenditures
|
(47.1
|
)
|
|
(31.3
|
)
|
||
Proceeds from asset sales
|
3.1
|
|
|
—
|
|
||
Changes in other assets and liabilities and other
|
3.0
|
|
|
8.5
|
|
||
Restricted cash
|
(3.8
|
)
|
|
1.0
|
|
||
Distributions of capital on equity investments
|
22.5
|
|
|
35.2
|
|
||
Net cash used in
investing activities
|
(107.8
|
)
|
|
(98.1
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Borrowings under revolving credit facility
|
160.0
|
|
|
110.0
|
|
||
Repayments under revolving credit facility
|
(175.0
|
)
|
|
(120.0
|
)
|
||
Payments on long-term debt
|
(25.2
|
)
|
|
(26.2
|
)
|
||
Repurchase of notes
|
(39.9
|
)
|
|
—
|
|
||
Payments on license obligations
|
(25.0
|
)
|
|
(18.7
|
)
|
||
Contingent earnout payments
|
—
|
|
|
(0.5
|
)
|
||
(Redemptions) issuance of common stock under stock-based compensation plans
|
(4.4
|
)
|
|
0.9
|
|
||
Net cash used in financing activities
|
(109.5
|
)
|
|
(54.5
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(1.9
|
)
|
|
(4.5
|
)
|
||
Decrease in cash and cash equivalents
|
(27.3
|
)
|
|
(42.7
|
)
|
||
Cash and cash equivalents, beginning of period
|
128.7
|
|
|
171.8
|
|
||
Cash and cash equivalents, end of period
|
$
|
101.4
|
|
|
$
|
129.1
|
|
|
|
Three Months Ended June 30, 2016
|
||||||||||||||
|
|
Gaming
|
|
Lottery
|
|
Interactive
|
|
Total
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||||||
Services
|
|
$
|
236.0
|
|
|
$
|
44.1
|
|
|
$
|
83.4
|
|
|
$
|
363.5
|
|
Product sales
|
|
205.9
|
|
|
8.9
|
|
|
—
|
|
|
214.8
|
|
||||
Instant games
|
|
—
|
|
|
150.9
|
|
|
—
|
|
|
150.9
|
|
||||
Total revenue
|
|
441.9
|
|
|
203.9
|
|
|
83.4
|
|
|
729.2
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Cost of services
(1)
|
|
44.4
|
|
|
26.8
|
|
|
30.2
|
|
|
101.4
|
|
||||
Cost of product sales
(1)
|
|
93.4
|
|
|
7.3
|
|
|
—
|
|
|
100.7
|
|
||||
Cost of instant games
(1)
|
|
—
|
|
|
74.1
|
|
|
—
|
|
|
74.1
|
|
||||
Selling, general and administrative
|
|
61.2
|
|
|
17.8
|
|
|
26.8
|
|
|
105.8
|
|
||||
Research and development
|
|
38.5
|
|
|
2.6
|
|
|
8.4
|
|
|
49.5
|
|
||||
Employee termination and restructuring
|
|
3.4
|
|
|
0.2
|
|
|
0.5
|
|
|
4.1
|
|
||||
Depreciation and amortization
|
|
154.3
|
|
|
17.2
|
|
|
3.8
|
|
|
175.3
|
|
||||
Segment operating income
|
|
$
|
46.7
|
|
|
$
|
57.9
|
|
|
$
|
13.7
|
|
|
$
|
118.3
|
|
Unallocated corporate costs
|
|
|
|
|
|
|
|
(59.2
|
)
|
|||||||
Consolidated operating income
|
|
|
|
|
|
|
|
$
|
59.1
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||||
Earnings from equity investments
|
|
$
|
1.4
|
|
|
$
|
6.6
|
|
|
$
|
—
|
|
|
$
|
8.0
|
|
|
|
Three Months Ended June 30, 2015
|
||||||||||||||
|
|
Gaming
|
|
Lottery
|
|
Interactive
|
|
Total
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||||||
Services
|
|
$
|
240.4
|
|
|
$
|
45.9
|
|
|
$
|
51.6
|
|
|
$
|
337.9
|
|
Product sales
|
|
209.3
|
|
|
8.8
|
|
|
—
|
|
|
218.1
|
|
||||
Instant games
|
|
—
|
|
|
135.5
|
|
|
—
|
|
|
135.5
|
|
||||
Total revenue
|
|
449.7
|
|
|
190.2
|
|
|
51.6
|
|
|
691.5
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Cost of services
(1)
|
|
53.1
|
|
|
27.5
|
|
|
18.0
|
|
|
98.6
|
|
||||
Cost of product sales
(1)
|
|
100.9
|
|
|
7.0
|
|
|
—
|
|
|
107.9
|
|
||||
Cost of instant games
(1)
|
|
—
|
|
|
68.8
|
|
|
—
|
|
|
68.8
|
|
||||
Selling, general and administrative
|
|
71.2
|
|
|
16.4
|
|
|
15.2
|
|
|
102.8
|
|
||||
Research and development
|
|
41.1
|
|
|
1.5
|
|
|
5.4
|
|
|
48.0
|
|
||||
Employee termination and restructuring
|
|
2.7
|
|
|
—
|
|
|
0.3
|
|
|
3.0
|
|
||||
Depreciation and amortization
|
|
181.5
|
|
|
20.0
|
|
|
5.4
|
|
|
206.9
|
|
||||
Segment operating (loss) income
|
|
$
|
(0.8
|
)
|
|
$
|
49.0
|
|
|
$
|
7.3
|
|
|
$
|
55.5
|
|
Unallocated corporate costs
|
|
|
|
|
|
|
|
(55.6
|
)
|
|||||||
Consolidated operating loss
|
|
|
|
|
|
|
|
$
|
(0.1
|
)
|
||||||
|
|
|
|
|
|
|
|
|
||||||||
Earnings from equity investments
|
|
$
|
1.8
|
|
|
$
|
1.5
|
|
|
$
|
—
|
|
|
$
|
3.3
|
|
|
|
Six Months Ended June 30, 2016
|
||||||||||||||
|
|
Gaming
|
|
Lottery
|
|
Interactive
|
|
Total
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||||||
Services
|
|
$
|
468.6
|
|
|
$
|
89.2
|
|
|
$
|
156.0
|
|
|
$
|
713.8
|
|
Product sales
|
|
395.0
|
|
|
17.4
|
|
|
—
|
|
|
412.4
|
|
||||
Instant games
|
|
—
|
|
|
285.0
|
|
|
—
|
|
|
285.0
|
|
||||
Total revenue
|
|
863.6
|
|
|
391.6
|
|
|
156.0
|
|
|
1,411.2
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Cost of services
(1)
|
|
85.6
|
|
|
54.9
|
|
|
55.8
|
|
|
196.3
|
|
||||
Cost of product sales
(1)
|
|
181.2
|
|
|
13.9
|
|
|
—
|
|
|
195.1
|
|
||||
Cost of instant games
(1)
|
|
—
|
|
|
141.1
|
|
|
—
|
|
|
141.1
|
|
||||
Selling, general and administrative
|
|
129.1
|
|
|
34.3
|
|
|
51.3
|
|
|
214.7
|
|
||||
Research and development
|
|
76.7
|
|
|
5.2
|
|
|
15.7
|
|
|
97.6
|
|
||||
Employee termination and restructuring
|
|
5.0
|
|
|
1.3
|
|
|
0.5
|
|
|
6.8
|
|
||||
Depreciation and amortization
|
|
295.9
|
|
|
35.0
|
|
|
7.5
|
|
|
338.4
|
|
||||
Segment operating income
|
|
$
|
90.1
|
|
|
$
|
105.9
|
|
|
$
|
25.2
|
|
|
$
|
221.2
|
|
Unallocated corporate costs
|
|
|
|
|
|
|
|
(111.8
|
)
|
|||||||
Consolidated operating income
|
|
|
|
|
|
|
|
$
|
109.4
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||||
Earnings from equity investments
|
|
$
|
1.4
|
|
|
$
|
9.8
|
|
|
$
|
—
|
|
|
$
|
11.2
|
|
|
|
Six Months Ended June 30, 2015
|
||||||||||||||
|
|
Gaming
|
|
Lottery
|
|
Interactive
|
|
Total
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||||||
Services
|
|
$
|
478.3
|
|
|
$
|
91.5
|
|
|
$
|
98.5
|
|
|
$
|
668.3
|
|
Product sales
|
|
397.2
|
|
|
20.3
|
|
|
—
|
|
|
417.5
|
|
||||
Instant games
|
|
—
|
|
|
264.4
|
|
|
—
|
|
|
264.4
|
|
||||
Total revenue
|
|
875.5
|
|
|
376.2
|
|
|
98.5
|
|
|
1,350.2
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Cost of services
(1)
|
|
98.6
|
|
|
55.9
|
|
|
34.6
|
|
|
189.1
|
|
||||
Cost of product sales
(1)
|
|
188.7
|
|
|
17.1
|
|
|
—
|
|
|
205.8
|
|
||||
Cost of instant games
(1)
|
|
—
|
|
|
135.8
|
|
|
—
|
|
|
135.8
|
|
||||
Selling, general and administrative
|
|
145.4
|
|
|
33.5
|
|
|
30.3
|
|
|
209.2
|
|
||||
Research and development
|
|
80.9
|
|
|
3.1
|
|
|
10.9
|
|
|
94.9
|
|
||||
Employee termination and restructuring
|
|
6.9
|
|
|
0.2
|
|
|
1.0
|
|
|
8.1
|
|
||||
Depreciation and amortization
|
|
324.8
|
|
|
41.3
|
|
|
10.5
|
|
|
376.6
|
|
||||
Segment operating income
|
|
$
|
30.2
|
|
|
$
|
89.3
|
|
|
$
|
11.2
|
|
|
$
|
130.7
|
|
Unallocated corporate costs
|
|
|
|
|
|
|
|
(112.7
|
)
|
|||||||
Consolidated operating income
|
|
|
|
|
|
|
|
$
|
18.0
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||||
Earnings from equity investments
|
|
$
|
1.7
|
|
|
$
|
4.7
|
|
|
$
|
—
|
|
|
$
|
6.4
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Business segment operating income
|
|
$
|
118.3
|
|
|
$
|
55.5
|
|
|
$
|
221.2
|
|
|
$
|
130.7
|
|
Unallocated corporate costs
|
|
(59.2
|
)
|
|
(55.6
|
)
|
|
(111.8
|
)
|
|
(112.7
|
)
|
||||
Consolidated operating income (loss)
|
|
59.1
|
|
|
(0.1
|
)
|
|
109.4
|
|
|
18.0
|
|
||||
Interest expense
|
|
(165.3
|
)
|
|
(166.4
|
)
|
|
(331.0
|
)
|
|
(330.7
|
)
|
||||
Earnings from equity investments
|
|
8.0
|
|
|
3.3
|
|
|
11.2
|
|
|
6.4
|
|
||||
Gain on early extinguishment of debt
|
|
25.2
|
|
|
—
|
|
|
25.2
|
|
|
—
|
|
||||
Other income (expense), net
|
|
1.7
|
|
|
(4.3
|
)
|
|
2.4
|
|
|
(9.9
|
)
|
||||
Net loss before income taxes
|
|
$
|
(71.3
|
)
|
|
$
|
(167.5
|
)
|
|
$
|
(182.8
|
)
|
|
$
|
(316.2
|
)
|
Business Segment
|
|
|
Employee Termination Costs
|
|
Property Costs
|
|
Other
|
|
Total
|
||||||||
Gaming
|
Three Months Ended June 30, 2016
|
|
$
|
2.2
|
|
|
$
|
—
|
|
|
$
|
1.2
|
|
|
$
|
3.4
|
|
|
Six Months Ended June 30, 2016
|
|
3.4
|
|
|
0.4
|
|
|
1.2
|
|
|
5.0
|
|
||||
|
Cumulative
|
|
24.6
|
|
|
0.4
|
|
|
2.8
|
|
|
27.8
|
|
||||
|
Expected Total
|
|
27.1
|
|
|
0.4
|
|
|
2.8
|
|
|
30.3
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Lottery
|
Three Months Ended June 30, 2016
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.2
|
|
||||
|
Six Months Ended June 30, 2016
|
|
1.1
|
|
|
—
|
|
|
0.2
|
|
|
1.3
|
|
||||
|
Cumulative
|
|
2.3
|
|
|
—
|
|
|
0.2
|
|
|
2.5
|
|
||||
|
Expected Total
|
|
2.3
|
|
|
—
|
|
|
0.2
|
|
|
2.5
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Interactive
|
Three Months Ended June 30, 2016
|
|
0.2
|
|
|
—
|
|
|
0.3
|
|
|
0.5
|
|
||||
|
Six Months Ended June 30, 2016
|
|
0.2
|
|
|
—
|
|
|
0.3
|
|
|
0.5
|
|
||||
|
Cumulative
|
|
2.7
|
|
|
—
|
|
|
2.0
|
|
|
4.7
|
|
||||
|
Expected Total
|
|
2.7
|
|
|
—
|
|
|
2.0
|
|
|
4.7
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Unallocated corporate
(1)
|
Three Months Ended June 30, 2016
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||
|
Six Months Ended June 30, 2016
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||
|
Cumulative
|
|
6.4
|
|
|
4.3
|
|
|
2.1
|
|
|
12.8
|
|
||||
|
Expected Total
|
|
8.9
|
|
|
4.3
|
|
|
2.1
|
|
|
15.3
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Total
|
Three Months Ended June 30, 2016
|
|
$
|
2.5
|
|
|
$
|
—
|
|
|
$
|
1.7
|
|
|
$
|
4.2
|
|
|
Six Months Ended June 30, 2016
|
|
$
|
4.8
|
|
|
$
|
0.4
|
|
|
$
|
1.7
|
|
|
$
|
6.9
|
|
|
Cumulative
|
|
$
|
36.0
|
|
|
$
|
4.7
|
|
|
$
|
7.1
|
|
|
$
|
47.8
|
|
|
Expected Total
|
|
$
|
41.0
|
|
|
$
|
4.7
|
|
|
$
|
7.1
|
|
|
$
|
52.8
|
|
|
|
Employee Termination Costs
|
|
Property Costs
|
|
Other
|
|
Total
|
||||||||
Balance as of December 31, 2015
|
|
$
|
7.3
|
|
|
$
|
0.8
|
|
|
$
|
1.4
|
|
|
$
|
9.5
|
|
Additional accruals
|
|
4.8
|
|
|
0.4
|
|
|
1.7
|
|
|
6.9
|
|
||||
Cash payments
|
|
(6.2
|
)
|
|
(0.9
|
)
|
|
(0.2
|
)
|
|
(7.3
|
)
|
||||
Balance as of June 30, 2016
|
|
$
|
5.9
|
|
|
$
|
0.3
|
|
|
$
|
2.9
|
|
|
$
|
9.1
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Loss (numerator):
|
|
|
|
|
|
|
|
|
|
|
||||||
Net loss
|
|
$
|
(51.7
|
)
|
|
$
|
(102.2
|
)
|
|
$
|
(144.0
|
)
|
|
$
|
(188.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Shares (denominator):
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted-average common shares outstanding
|
|
87.3
|
|
|
85.9
|
|
|
86.9
|
|
|
85.6
|
|
||||
Diluted weighted-average common shares outstanding
|
|
87.3
|
|
|
85.9
|
|
|
86.9
|
|
|
85.6
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted net loss per share amounts:
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic net loss per share
|
|
$
|
(0.59
|
)
|
|
$
|
(1.19
|
)
|
|
$
|
(1.66
|
)
|
|
$
|
(2.20
|
)
|
Diluted net loss per share
|
|
$
|
(0.59
|
)
|
|
$
|
(1.19
|
)
|
|
$
|
(1.66
|
)
|
|
$
|
(2.20
|
)
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
Current:
|
|
|
|
||||
Accounts receivable
|
$
|
514.0
|
|
|
$
|
497.7
|
|
Notes receivable
|
154.5
|
|
|
180.4
|
|
||
Allowance for doubtful accounts
|
(27.2
|
)
|
|
(23.3
|
)
|
||
Current accounts and notes receivable, net
|
$
|
641.3
|
|
|
$
|
654.8
|
|
Long-term:
|
|
|
|
||||
Notes receivable, net
|
43.8
|
|
|
51.3
|
|
||
Total accounts and notes receivable, net
|
$
|
685.1
|
|
|
$
|
706.1
|
|
|
June 30, 2016
|
|
Balances over 90 days past due
|
|
December 31, 2015
|
|
Balances over 90 days past due
|
||||||||
Notes receivable:
|
|
|
|
|
|
|
|
||||||||
Domestic
|
$
|
39.6
|
|
|
$
|
2.0
|
|
|
$
|
62.4
|
|
|
$
|
2.6
|
|
International
|
159.0
|
|
|
41.5
|
|
|
169.8
|
|
|
26.6
|
|
||||
Total notes receivable
|
198.6
|
|
|
43.5
|
|
|
232.2
|
|
|
29.2
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Notes receivable allowance for doubtful accounts:
|
|
|
|
|
|
|
|
||||||||
Domestic
|
(2.3
|
)
|
|
(2.3
|
)
|
|
(2.6
|
)
|
|
(2.5
|
)
|
||||
International
|
(12.5
|
)
|
|
(12.5
|
)
|
|
(10.6
|
)
|
|
(9.5
|
)
|
||||
Total notes receivable allowance for doubtful accounts
|
(14.8
|
)
|
|
(14.8
|
)
|
|
(13.2
|
)
|
|
(12.0
|
)
|
||||
Notes receivable, net
|
$
|
183.8
|
|
|
$
|
28.7
|
|
|
$
|
219.0
|
|
|
$
|
17.2
|
|
|
June 30, 2016
|
|
Ending Balance Individually Evaluated for Impairment
|
|
Ending Balance Collectively Evaluated for Impairment
|
||||||
Notes receivable:
|
|
|
|
|
|
||||||
Domestic
|
$
|
39.6
|
|
|
$
|
13.7
|
|
|
$
|
25.9
|
|
International
|
159.0
|
|
|
81.7
|
|
|
77.3
|
|
|||
Total notes receivable
|
$
|
198.6
|
|
|
$
|
95.4
|
|
|
$
|
103.2
|
|
|
December 31, 2015
|
|
Ending Balance Individually Evaluated for Impairment
|
|
Ending Balance Collectively Evaluated for Impairment
|
||||||
Notes receivable:
|
|
|
|
|
|
||||||
Domestic
|
$
|
62.4
|
|
|
$
|
20.7
|
|
|
$
|
41.7
|
|
International
|
169.8
|
|
|
101.8
|
|
|
68.0
|
|
|||
Total notes receivable
|
$
|
232.2
|
|
|
$
|
122.5
|
|
|
$
|
109.7
|
|
|
Total
|
|
Ending Balance Individually Evaluated for Impairment
|
|
Ending Balance Collectively Evaluated for Impairment
|
||||||
Beginning balance at December 31, 2015
|
$
|
13.2
|
|
|
$
|
12.9
|
|
|
$
|
0.3
|
|
Charge-offs
|
(1.3
|
)
|
|
(1.3
|
)
|
|
—
|
|
|||
Recoveries
|
(0.2
|
)
|
|
(0.2
|
)
|
|
—
|
|
|||
Provision
|
3.1
|
|
|
3.1
|
|
|
—
|
|
|||
Ending balance at June 30, 2016
|
$
|
14.8
|
|
|
$
|
14.5
|
|
|
$
|
0.3
|
|
|
Total
|
|
Ending Balance Individually Evaluated for Impairment
|
|
Ending Balance Collectively Evaluated for Impairment
|
||||||
Beginning balance at December 31, 2014
|
$
|
5.9
|
|
|
$
|
5.9
|
|
|
$
|
—
|
|
Charge-offs
|
(2.1
|
)
|
|
(2.1
|
)
|
|
—
|
|
|||
Recoveries
|
(0.5
|
)
|
|
(0.4
|
)
|
|
(0.1
|
)
|
|||
Provision
|
6.4
|
|
|
5.2
|
|
|
1.2
|
|
|||
Ending balance at June 30, 2015
|
$
|
9.7
|
|
|
$
|
8.6
|
|
|
$
|
1.1
|
|
|
|
|
|
|
|
|
Mexico
|
26
|
%
|
Peru
|
17
|
%
|
Argentina
|
9
|
%
|
Columbia
|
6
|
%
|
Other (less than 5% individually)
|
22
|
%
|
Total international notes receivable as a percentage of total notes receivable
|
80
|
%
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
Parts and work-in-process
|
|
$
|
128.6
|
|
|
$
|
118.3
|
|
Finished goods
|
|
120.4
|
|
|
130.2
|
|
||
Total inventories
|
|
$
|
249.0
|
|
|
$
|
248.5
|
|
|
|
|
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
Land
|
|
$
|
38.4
|
|
|
$
|
38.5
|
|
Buildings and leasehold improvements
|
|
184.7
|
|
|
185.2
|
|
||
Gaming and lottery machinery and equipment
|
|
1,048.5
|
|
|
1,084.6
|
|
||
Furniture and fixtures
|
|
31.4
|
|
|
36.0
|
|
||
Construction in progress
|
|
27.9
|
|
|
25.5
|
|
||
Other property and equipment
|
|
264.5
|
|
|
271.0
|
|
||
Less: accumulated depreciation
|
|
(899.9
|
)
|
|
(846.8
|
)
|
||
Total property and equipment, net
|
|
$
|
695.5
|
|
|
$
|
794.0
|
|
Intangible Assets
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Balance
|
||||||
Balance as of June 30, 2016
|
|
|
|
|
|
||||||
Amortizable intangible assets:
|
|
|
|
|
|
||||||
Patents
|
$
|
26.3
|
|
|
$
|
(13.1
|
)
|
|
$
|
13.2
|
|
Customer relationships
|
877.7
|
|
|
(136.8
|
)
|
|
740.9
|
|
|||
Licenses
|
412.5
|
|
|
(121.8
|
)
|
|
290.7
|
|
|||
Intellectual property
(1)
|
731.5
|
|
|
(170.3
|
)
|
|
561.2
|
|
|||
Trade names
|
97.4
|
|
|
(4.9
|
)
|
|
92.5
|
|
|||
Brand names
|
124.4
|
|
|
(25.6
|
)
|
|
98.8
|
|
|||
Non-compete agreements
|
0.2
|
|
|
(0.2
|
)
|
|
—
|
|
|||
|
2,270.0
|
|
|
(472.7
|
)
|
|
1,797.3
|
|
|||
Non-amortizable intangible assets:
|
|
|
|
|
|
||||||
Trade names
|
96.7
|
|
|
(2.1
|
)
|
|
94.6
|
|
|||
Total intangible assets
|
$
|
2,366.7
|
|
|
$
|
(474.8
|
)
|
|
$
|
1,891.9
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Balance as of December 31, 2015
|
|
|
|
|
|
||||||
Amortizable intangible assets:
|
|
|
|
|
|
||||||
Patents
|
$
|
26.8
|
|
|
$
|
(12.5
|
)
|
|
$
|
14.3
|
|
Customer relationships
|
877.7
|
|
|
(109.1
|
)
|
|
768.6
|
|
|||
Licenses
|
326.1
|
|
|
(91.6
|
)
|
|
234.5
|
|
|||
Intellectual property
(1)
|
731.1
|
|
|
(124.5
|
)
|
|
606.6
|
|
|||
Trade names
|
97.5
|
|
|
(1.9
|
)
|
|
95.6
|
|
|||
Brand names
|
124.0
|
|
|
(18.9
|
)
|
|
105.1
|
|
|||
Non-compete agreements
|
0.3
|
|
|
(0.3
|
)
|
|
—
|
|
|||
|
2,183.5
|
|
|
(358.8
|
)
|
|
1,824.7
|
|
|||
Non-amortizable intangible assets:
|
|
|
|
|
|
||||||
Trade names
|
97.4
|
|
|
(2.1
|
)
|
|
95.3
|
|
|||
Total intangible assets
|
$
|
2,280.9
|
|
|
$
|
(360.9
|
)
|
|
$
|
1,920.0
|
|
Goodwill
|
|
Gaming
|
|
Lottery
|
|
Interactive
|
|
Totals
|
||||||||
Balance as of December 31, 2015
|
|
$
|
2,486.0
|
|
|
$
|
417.9
|
|
|
$
|
109.8
|
|
|
$
|
3,013.7
|
|
Foreign currency adjustments
|
|
(23.0
|
)
|
|
1.8
|
|
|
—
|
|
|
(21.2
|
)
|
||||
Balance as of June 30, 2016
|
|
$
|
2,463.0
|
|
|
$
|
419.7
|
|
|
$
|
109.8
|
|
|
$
|
2,992.5
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
Software
|
|
$
|
894.8
|
|
|
$
|
854.2
|
|
Accumulated amortization
|
|
(451.6
|
)
|
|
(368.3
|
)
|
||
Software, net
|
|
$
|
443.2
|
|
|
$
|
485.9
|
|
|
|
Principal
|
|
Unamortized debt discount
|
|
Unamortized deferred financing costs
|
|
Book value June 30, 2016
|
||||||||
Senior Secured Credit Facilities:
|
|
|
|
|
|
|
|
|
||||||||
Revolver, varying interest rate, due 2018
|
|
$
|
80.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
80.0
|
|
Term Loan, varying interest rate, due 2020
|
|
2,242.5
|
|
|
(6.9
|
)
|
|
(47.0
|
)
|
|
2,188.6
|
|
||||
Term Loan, varying interest rate, due 2021
|
|
1,970.0
|
|
|
(15.2
|
)
|
|
(44.8
|
)
|
|
1,910.0
|
|
||||
2018 Notes
|
|
250.0
|
|
|
—
|
|
|
(1.6
|
)
|
|
248.4
|
|
||||
2020 Notes
|
|
243.5
|
|
|
—
|
|
|
(2.6
|
)
|
|
240.9
|
|
||||
2021 Notes
|
|
340.6
|
|
|
(1.6
|
)
|
|
(5.1
|
)
|
|
333.9
|
|
||||
Secured Notes
|
|
950.0
|
|
|
—
|
|
|
(15.1
|
)
|
|
934.9
|
|
||||
Unsecured Notes
|
|
2,200.0
|
|
|
—
|
|
|
(39.1
|
)
|
|
2,160.9
|
|
||||
Capital lease obligations, 3.9% interest as of June 30, 2016 payable monthly through 2019
|
|
19.7
|
|
|
—
|
|
|
—
|
|
|
19.7
|
|
||||
Total long-term debt outstanding
|
|
$
|
8,296.3
|
|
|
$
|
(23.7
|
)
|
|
$
|
(155.3
|
)
|
|
$
|
8,117.3
|
|
Less: current portion of long-term debt
|
|
|
|
|
|
|
|
(49.7
|
)
|
|||||||
Long-term debt, excluding current portion
|
|
|
|
|
|
|
|
|
$
|
8,067.6
|
|
|||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Principal
|
|
Unamortized debt discount
|
|
Unamortized deferred financing costs
|
|
Book value December 31, 2015
|
||||||||
Senior Secured Credit Facilities:
|
|
|
|
|
|
|
|
|
||||||||
Revolver, varying interest rate, due 2018
|
|
$
|
95.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
95.0
|
|
Term Loan, varying interest rate, due 2020
|
|
2,254.0
|
|
|
(7.8
|
)
|
|
(52.5
|
)
|
|
2,193.7
|
|
||||
Term Loan, varying interest rate, due 2021
|
|
1,980.0
|
|
|
(16.7
|
)
|
|
(49.2
|
)
|
|
1,914.1
|
|
||||
2018 Notes
|
|
250.0
|
|
|
—
|
|
|
(2.0
|
)
|
|
248.0
|
|
||||
2020 Notes
|
|
300.0
|
|
|
—
|
|
|
(3.6
|
)
|
|
296.4
|
|
||||
2021 Notes
|
|
350.0
|
|
|
(1.8
|
)
|
|
(5.6
|
)
|
|
342.6
|
|
||||
Secured Notes
|
|
950.0
|
|
|
—
|
|
|
(16.4
|
)
|
|
933.6
|
|
||||
Unsecured Notes
|
|
2,200.0
|
|
|
—
|
|
|
(42.1
|
)
|
|
2,157.9
|
|
||||
Capital lease obligations, 3.9% interest as of December 31, 2015 payable monthly through 2019
|
|
25.7
|
|
|
—
|
|
|
—
|
|
|
25.7
|
|
||||
Total long-term debt outstanding
|
|
$
|
8,404.7
|
|
|
$
|
(26.3
|
)
|
|
$
|
(171.4
|
)
|
|
$
|
8,207.0
|
|
Less: current portion of long-term debt
|
|
|
|
|
|
|
|
(50.3
|
)
|
|||||||
Long-term debt, excluding current portion
|
|
|
|
|
|
|
|
|
$
|
8,156.7
|
|
|
|
Number of
Restricted Stock Units
|
|
Weighted Average Grant Date Fair Value
|
|||
Unvested RSUs as of December 31, 2015
|
|
5.6
|
|
|
$
|
13.05
|
|
Granted
|
|
0.2
|
|
|
8.21
|
|
|
Vested
|
|
(0.8
|
)
|
|
12.46
|
|
|
Canceled
|
|
(0.4
|
)
|
|
12.56
|
|
|
Unvested RSUs as of March 31, 2016
|
|
4.6
|
|
|
$
|
13.00
|
|
Granted
|
|
1.4
|
|
|
9.60
|
|
|
Vested
|
|
(0.6
|
)
|
|
12.51
|
|
|
Canceled
|
|
(0.1
|
)
|
|
13.35
|
|
|
Unvested RSUs as of June 30, 2016
|
|
5.3
|
|
|
$
|
12.16
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
||||||
|
2016
|
|
2015
|
||||
Interest paid
|
$
|
313.6
|
|
|
$
|
294.6
|
|
Income taxes paid (received)
|
$
|
6.6
|
|
|
$
|
(4.1
|
)
|
|
|
Parent
Company |
|
SGI
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
|
$
|
32.4
|
|
|
$
|
0.5
|
|
|
$
|
—
|
|
|
$
|
68.5
|
|
|
$
|
—
|
|
|
$
|
101.4
|
|
Restricted cash
|
|
—
|
|
|
—
|
|
|
24.4
|
|
|
0.1
|
|
|
—
|
|
|
24.5
|
|
||||||
Accounts receivable, net
|
|
—
|
|
|
98.0
|
|
|
226.5
|
|
|
176.8
|
|
|
—
|
|
|
501.3
|
|
||||||
Notes receivable, net
|
|
—
|
|
|
—
|
|
|
91.2
|
|
|
48.8
|
|
|
—
|
|
|
140.0
|
|
||||||
Inventories
|
|
—
|
|
|
35.8
|
|
|
89.4
|
|
|
136.2
|
|
|
(12.4
|
)
|
|
249.0
|
|
||||||
Prepaid expenses, deposits and other current assets
|
|
31.6
|
|
|
14.1
|
|
|
35.1
|
|
|
40.1
|
|
|
—
|
|
|
120.9
|
|
||||||
Property and equipment, net
|
|
11.9
|
|
|
101.4
|
|
|
430.4
|
|
|
166.3
|
|
|
(14.5
|
)
|
|
695.5
|
|
||||||
Investment in subsidiaries
|
|
3,202.2
|
|
|
851.8
|
|
|
796.8
|
|
|
—
|
|
|
(4,850.8
|
)
|
|
—
|
|
||||||
Goodwill
|
|
—
|
|
|
188.3
|
|
|
1,988.2
|
|
|
816.0
|
|
|
—
|
|
|
2,992.5
|
|
||||||
Intangible assets, net
|
|
207.1
|
|
|
38.7
|
|
|
1,423.6
|
|
|
222.5
|
|
|
—
|
|
|
1,891.9
|
|
||||||
Intercompany balances
|
|
—
|
|
|
6,531.8
|
|
|
—
|
|
|
—
|
|
|
(6,531.8
|
)
|
|
—
|
|
||||||
Software, net
|
|
52.4
|
|
|
25.4
|
|
|
316.3
|
|
|
49.1
|
|
|
—
|
|
|
443.2
|
|
||||||
Other assets
|
|
291.0
|
|
|
119.3
|
|
|
44.7
|
|
|
214.6
|
|
|
(364.7
|
)
|
|
304.9
|
|
||||||
Total assets
|
|
$
|
3,828.6
|
|
|
$
|
8,005.1
|
|
|
$
|
5,466.6
|
|
|
$
|
1,939.0
|
|
|
$
|
(11,774.2
|
)
|
|
$
|
7,465.1
|
|
Liabilities and stockholders' (deficit) equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current portion of long-term debt
|
|
$
|
—
|
|
|
$
|
43.0
|
|
|
$
|
—
|
|
|
$
|
6.7
|
|
|
$
|
—
|
|
|
$
|
49.7
|
|
Other current liabilities
|
|
74.3
|
|
|
153.2
|
|
|
208.4
|
|
|
159.8
|
|
|
—
|
|
|
595.7
|
|
||||||
Long-term debt, excluding current portion
|
|
248.4
|
|
|
7,806.2
|
|
|
—
|
|
|
13.0
|
|
|
—
|
|
|
8,067.6
|
|
||||||
Other long-term liabilities
|
|
179.2
|
|
|
14.2
|
|
|
498.8
|
|
|
91.5
|
|
|
(364.7
|
)
|
|
419.0
|
|
||||||
Intercompany balances
|
|
4,993.6
|
|
|
—
|
|
|
1,503.7
|
|
|
34.5
|
|
|
(6,531.8
|
)
|
|
—
|
|
||||||
Stockholders' (deficit) equity
|
|
(1,666.9
|
)
|
|
(11.5
|
)
|
|
3,255.7
|
|
|
1,633.5
|
|
|
(4,877.7
|
)
|
|
(1,666.9
|
)
|
||||||
Total liabilities and stockholders' (deficit) equity
|
|
$
|
3,828.6
|
|
|
$
|
8,005.1
|
|
|
$
|
5,466.6
|
|
|
$
|
1,939.0
|
|
|
$
|
(11,774.2
|
)
|
|
$
|
7,465.1
|
|
|
|
Parent
Company |
|
SGI
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
|
$
|
43.2
|
|
|
$
|
—
|
|
|
$
|
4.7
|
|
|
$
|
80.8
|
|
|
$
|
—
|
|
|
$
|
128.7
|
|
Restricted cash
|
|
—
|
|
|
—
|
|
|
20.0
|
|
|
0.2
|
|
|
—
|
|
|
20.2
|
|
||||||
Accounts receivable, net
|
|
—
|
|
|
94.6
|
|
|
233.6
|
|
|
158.9
|
|
|
—
|
|
|
487.1
|
|
||||||
Notes receivable, net
|
|
—
|
|
|
—
|
|
|
114.2
|
|
|
53.5
|
|
|
—
|
|
|
167.7
|
|
||||||
Inventories
|
|
—
|
|
|
36.9
|
|
|
104.2
|
|
|
119.6
|
|
|
(12.2
|
)
|
|
248.5
|
|
||||||
Prepaid expenses, deposits and other current assets
|
|
26.8
|
|
|
7.0
|
|
|
52.1
|
|
|
37.4
|
|
|
—
|
|
|
123.3
|
|
||||||
Property and equipment, net
|
|
8.2
|
|
|
106.4
|
|
|
502.2
|
|
|
188.7
|
|
|
(11.5
|
)
|
|
794.0
|
|
||||||
Investment in subsidiaries
|
|
3,280.9
|
|
|
838.1
|
|
|
648.3
|
|
|
—
|
|
|
(4,767.3
|
)
|
|
—
|
|
||||||
Goodwill
|
|
—
|
|
|
186.0
|
|
|
1,990.5
|
|
|
837.2
|
|
|
—
|
|
|
3,013.7
|
|
||||||
Intangible assets, net
|
|
138.3
|
|
|
39.8
|
|
|
1,505.8
|
|
|
236.1
|
|
|
—
|
|
|
1,920.0
|
|
||||||
Intercompany balances
|
|
—
|
|
|
6,511.1
|
|
|
—
|
|
|
—
|
|
|
(6,511.1
|
)
|
|
—
|
|
||||||
Software, net
|
|
35.6
|
|
|
32.7
|
|
|
359.8
|
|
|
57.8
|
|
|
—
|
|
|
485.9
|
|
||||||
Other assets
|
|
232.5
|
|
|
123.4
|
|
|
51.7
|
|
|
241.7
|
|
|
(306.2
|
)
|
|
343.1
|
|
||||||
Total assets
|
|
$
|
3,765.5
|
|
|
$
|
7,976.0
|
|
|
$
|
5,587.1
|
|
|
$
|
2,011.9
|
|
|
$
|
(11,608.3
|
)
|
|
$
|
7,732.2
|
|
Liabilities and stockholders' (deficit) equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current portion of long-term debt
|
|
$
|
—
|
|
|
$
|
43.0
|
|
|
$
|
—
|
|
|
$
|
7.3
|
|
|
$
|
—
|
|
|
$
|
50.3
|
|
Other current liabilities
|
|
63.7
|
|
|
150.5
|
|
|
245.4
|
|
|
144.0
|
|
|
—
|
|
|
603.6
|
|
||||||
Long-term debt, excluding current portion
|
|
248.0
|
|
|
7,890.3
|
|
|
—
|
|
|
18.4
|
|
|
—
|
|
|
8,156.7
|
|
||||||
Other long-term liabilities
|
|
119.1
|
|
|
14.5
|
|
|
502.1
|
|
|
87.7
|
|
|
(306.3
|
)
|
|
417.1
|
|
||||||
Intercompany balances
|
|
4,830.2
|
|
|
—
|
|
|
1,558.2
|
|
|
122.6
|
|
|
(6,511.0
|
)
|
|
—
|
|
||||||
Stockholders' (deficit) equity
|
|
(1,495.5
|
)
|
|
(122.3
|
)
|
|
3,281.4
|
|
|
1,631.9
|
|
|
(4,791.0
|
)
|
|
(1,495.5
|
)
|
||||||
Total liabilities and stockholders' (deficit) equity
|
|
$
|
3,765.5
|
|
|
$
|
7,976.0
|
|
|
$
|
5,587.1
|
|
|
$
|
2,011.9
|
|
|
$
|
(11,608.3
|
)
|
|
$
|
7,732.2
|
|
|
|
Parent
Company |
|
SGI
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
126.4
|
|
|
$
|
408.6
|
|
|
$
|
265.5
|
|
|
$
|
(71.3
|
)
|
|
$
|
729.2
|
|
Cost of services, cost of product sales and cost of instant games
(1)
|
|
—
|
|
|
86.1
|
|
|
108.8
|
|
|
152.6
|
|
|
(71.3
|
)
|
|
276.2
|
|
||||||
Selling, general and administrative
|
|
36.9
|
|
|
11.7
|
|
|
51.7
|
|
|
44.6
|
|
|
—
|
|
|
144.9
|
|
||||||
Research and development
|
|
1.9
|
|
|
2.3
|
|
|
39.1
|
|
|
8.4
|
|
|
—
|
|
|
51.7
|
|
||||||
Employee termination and restructuring
|
|
0.1
|
|
|
(0.1
|
)
|
|
3.3
|
|
|
0.9
|
|
|
—
|
|
|
4.2
|
|
||||||
Depreciation and amortization
|
|
13.0
|
|
|
10.3
|
|
|
141.1
|
|
|
28.7
|
|
|
—
|
|
|
193.1
|
|
||||||
Operating (loss) income
|
|
(51.9
|
)
|
|
16.1
|
|
|
64.6
|
|
|
30.3
|
|
|
—
|
|
|
59.1
|
|
||||||
Interest expense
|
|
—
|
|
|
(35.1
|
)
|
|
(130.1
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(165.3
|
)
|
||||||
Gain on early extinguishment of debt
|
|
—
|
|
|
25.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25.2
|
|
||||||
Other (expense) income, net
|
|
(24.7
|
)
|
|
52.5
|
|
|
(24.2
|
)
|
|
6.1
|
|
|
—
|
|
|
9.7
|
|
||||||
Net (loss) income before equity in (loss) income of subsidiaries and income taxes
|
|
(76.6
|
)
|
|
58.7
|
|
|
(89.7
|
)
|
|
36.3
|
|
|
—
|
|
|
(71.3
|
)
|
||||||
Equity in (loss) income of subsidiaries
|
|
—
|
|
|
11.3
|
|
|
9.3
|
|
|
—
|
|
|
(20.6
|
)
|
|
—
|
|
||||||
Income tax benefit (expense)
|
|
24.9
|
|
|
—
|
|
|
—
|
|
|
(5.3
|
)
|
|
—
|
|
|
19.6
|
|
||||||
Net (loss) income
|
|
$
|
(51.7
|
)
|
|
$
|
70.0
|
|
|
$
|
(80.4
|
)
|
|
$
|
31.0
|
|
|
$
|
(20.6
|
)
|
|
$
|
(51.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive (loss) income
|
|
(30.2
|
)
|
|
3.2
|
|
|
(8.1
|
)
|
|
(33.4
|
)
|
|
38.3
|
|
|
(30.2
|
)
|
||||||
Comprehensive (loss) income
|
|
$
|
(81.9
|
)
|
|
$
|
73.2
|
|
|
$
|
(88.5
|
)
|
|
$
|
(2.4
|
)
|
|
$
|
17.7
|
|
|
$
|
(81.9
|
)
|
|
|
Parent
Company |
|
SGI
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
106.4
|
|
|
$
|
430.6
|
|
|
$
|
261.5
|
|
|
$
|
(107.0
|
)
|
|
$
|
691.5
|
|
Cost of services, cost of product sales and cost of instant games
(1)
|
|
—
|
|
|
79.0
|
|
|
139.5
|
|
|
163.8
|
|
|
(107.0
|
)
|
|
275.3
|
|
||||||
Selling, general and administrative
|
|
16.7
|
|
|
18.4
|
|
|
70.8
|
|
|
35.0
|
|
|
—
|
|
|
140.9
|
|
||||||
Research and development
|
|
—
|
|
|
1.4
|
|
|
39.3
|
|
|
7.3
|
|
|
—
|
|
|
48.0
|
|
||||||
Employee termination and restructuring
|
|
1.4
|
|
|
0.7
|
|
|
2.4
|
|
|
0.7
|
|
|
—
|
|
|
5.2
|
|
||||||
Depreciation and amortization
|
|
8.1
|
|
|
9.8
|
|
|
170.8
|
|
|
33.5
|
|
|
—
|
|
|
222.2
|
|
||||||
Operating (loss) income
|
|
(26.2
|
)
|
|
(2.9
|
)
|
|
7.8
|
|
|
21.2
|
|
|
—
|
|
|
(0.1
|
)
|
||||||
Interest expense
|
|
(5.3
|
)
|
|
(83.1
|
)
|
|
(77.9
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(166.4
|
)
|
||||||
Other (expense) income, net
|
|
6.2
|
|
|
18.3
|
|
|
(29.0
|
)
|
|
3.5
|
|
|
—
|
|
|
(1.0
|
)
|
||||||
Net (loss) income before equity in (loss) income of subsidiaries and income taxes
|
|
(25.3
|
)
|
|
(67.7
|
)
|
|
(99.1
|
)
|
|
24.6
|
|
|
—
|
|
|
(167.5
|
)
|
||||||
Equity in (loss) income of subsidiaries
|
|
(143.0
|
)
|
|
22.7
|
|
|
9.5
|
|
|
—
|
|
|
110.8
|
|
|
—
|
|
||||||
Income tax benefit (expense)
|
|
66.1
|
|
|
(0.1
|
)
|
|
2.9
|
|
|
(3.6
|
)
|
|
—
|
|
|
65.3
|
|
||||||
Net (loss) income
|
|
$
|
(102.2
|
)
|
|
$
|
(45.1
|
)
|
|
$
|
(86.7
|
)
|
|
$
|
21.0
|
|
|
$
|
110.8
|
|
|
$
|
(102.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss)
|
|
23.1
|
|
|
3.3
|
|
|
(25.4
|
)
|
|
42.4
|
|
|
(20.3
|
)
|
|
23.1
|
|
||||||
Comprehensive (loss) income
|
|
$
|
(79.1
|
)
|
|
$
|
(41.8
|
)
|
|
$
|
(112.1
|
)
|
|
$
|
63.4
|
|
|
$
|
90.5
|
|
|
$
|
(79.1
|
)
|
|
|
Parent
Company |
|
SGI
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
241.7
|
|
|
$
|
816.5
|
|
|
$
|
483.4
|
|
|
$
|
(130.4
|
)
|
|
$
|
1,411.2
|
|
Cost of instant games, cost of services and cost of product sales
(1)
|
|
—
|
|
|
169.0
|
|
|
219.8
|
|
|
274.1
|
|
|
(130.4
|
)
|
|
532.5
|
|
||||||
Selling, general and administrative
|
|
61.0
|
|
|
22.9
|
|
|
119.4
|
|
|
83.9
|
|
|
—
|
|
|
287.2
|
|
||||||
Research and development
|
|
2.8
|
|
|
4.6
|
|
|
78.4
|
|
|
15.7
|
|
|
—
|
|
|
101.5
|
|
||||||
Employee termination and restructuring
|
|
0.1
|
|
|
—
|
|
|
4.1
|
|
|
2.7
|
|
|
—
|
|
|
6.9
|
|
||||||
Depreciation and amortization
|
|
25.8
|
|
|
21.1
|
|
|
267.9
|
|
|
58.9
|
|
|
—
|
|
|
373.7
|
|
||||||
Operating (loss) income
|
|
(89.7
|
)
|
|
24.1
|
|
|
126.9
|
|
|
48.1
|
|
|
—
|
|
|
109.4
|
|
||||||
Interest expense
|
|
(0.1
|
)
|
|
(69.9
|
)
|
|
(260.9
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(331.0
|
)
|
||||||
Gain on early extinguishment of debt
|
|
—
|
|
|
25.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25.2
|
|
||||||
Other (expense) income, net
|
|
(50.3
|
)
|
|
102.8
|
|
|
(47.3
|
)
|
|
8.4
|
|
|
—
|
|
|
13.6
|
|
||||||
Net (loss) income before equity in (loss) income of subsidiaries and income taxes
|
|
(140.1
|
)
|
|
82.2
|
|
|
(181.3
|
)
|
|
56.4
|
|
|
—
|
|
|
(182.8
|
)
|
||||||
Equity in (loss) income of subsidiaries
|
|
(51.0
|
)
|
|
30.2
|
|
|
16.2
|
|
|
—
|
|
|
4.6
|
|
|
—
|
|
||||||
Income tax benefit (expense)
|
|
47.1
|
|
|
—
|
|
|
—
|
|
|
(8.3
|
)
|
|
—
|
|
|
38.8
|
|
||||||
Net (loss) income
|
|
$
|
(144.0
|
)
|
|
$
|
112.4
|
|
|
$
|
(165.1
|
)
|
|
$
|
48.1
|
|
|
$
|
4.6
|
|
|
$
|
(144.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss)
|
|
(32.6
|
)
|
|
3.0
|
|
|
(6.2
|
)
|
|
(30.7
|
)
|
|
33.9
|
|
|
(32.6
|
)
|
||||||
Comprehensive (loss) income
|
|
$
|
(176.6
|
)
|
|
$
|
115.4
|
|
|
$
|
(171.3
|
)
|
|
$
|
17.4
|
|
|
$
|
38.5
|
|
|
$
|
(176.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Parent
Company |
|
SGI
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Revenue
|
|
$
|
—
|
|
|
$
|
217.6
|
|
|
$
|
862.9
|
|
|
$
|
470.3
|
|
|
$
|
(200.6
|
)
|
|
$
|
1,350.2
|
|
Cost of instant games, cost of services and cost of product sales
(1)
|
|
—
|
|
|
160.3
|
|
|
284.8
|
|
|
286.2
|
|
|
(200.6
|
)
|
|
530.7
|
|
||||||
Selling, general and administrative
|
|
31.6
|
|
|
34.6
|
|
|
145.1
|
|
|
75.5
|
|
|
—
|
|
|
286.8
|
|
||||||
Research and development
|
|
—
|
|
|
2.8
|
|
|
77.1
|
|
|
15.0
|
|
|
—
|
|
|
94.9
|
|
||||||
Employee termination and restructuring
|
|
3.2
|
|
|
0.9
|
|
|
6.9
|
|
|
2.4
|
|
|
—
|
|
|
13.4
|
|
||||||
Depreciation and amortization
|
|
16.0
|
|
|
19.6
|
|
|
299.6
|
|
|
71.2
|
|
|
—
|
|
|
406.4
|
|
||||||
Operating (loss) income
|
|
(50.8
|
)
|
|
(0.6
|
)
|
|
49.4
|
|
|
20.0
|
|
|
—
|
|
|
18.0
|
|
||||||
Interest expense
|
|
(3.9
|
)
|
|
(119.3
|
)
|
|
(207.3
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
(330.7
|
)
|
||||||
Other (expense) income, net
|
|
18.0
|
|
|
35.9
|
|
|
(68.8
|
)
|
|
11.4
|
|
|
—
|
|
|
(3.5
|
)
|
||||||
Net (loss) income before equity in (loss) income of subsidiaries and income taxes
|
|
(36.7
|
)
|
|
(84.0
|
)
|
|
(226.7
|
)
|
|
31.2
|
|
|
—
|
|
|
(316.2
|
)
|
||||||
Equity in (loss) income of subsidiaries
|
|
(281.3
|
)
|
|
29.3
|
|
|
3.3
|
|
|
—
|
|
|
248.7
|
|
|
—
|
|
||||||
Income tax benefit (expense)
|
|
129.4
|
|
|
(0.1
|
)
|
|
2.9
|
|
|
(4.6
|
)
|
|
—
|
|
|
127.6
|
|
||||||
Net (loss) income
|
|
$
|
(188.6
|
)
|
|
$
|
(54.8
|
)
|
|
$
|
(220.5
|
)
|
|
$
|
26.6
|
|
|
$
|
248.7
|
|
|
$
|
(188.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive loss
|
|
(87.1
|
)
|
|
(9.8
|
)
|
|
(8.5
|
)
|
|
(77.2
|
)
|
|
95.5
|
|
|
(87.1
|
)
|
||||||
Comprehensive loss
|
|
$
|
(275.7
|
)
|
|
$
|
(64.6
|
)
|
|
$
|
(229.0
|
)
|
|
$
|
(50.6
|
)
|
|
$
|
344.2
|
|
|
$
|
(275.7
|
)
|
|
|
Parent
Company |
|
SGI
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Net cash (used in) provided by operating activities
|
|
$
|
(109.5
|
)
|
|
$
|
122.1
|
|
|
$
|
104.8
|
|
|
$
|
74.5
|
|
|
$
|
—
|
|
|
$
|
191.9
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Capital expenditures
|
|
(26.7
|
)
|
|
(5.2
|
)
|
|
(77.3
|
)
|
|
(23.4
|
)
|
|
—
|
|
|
(132.6
|
)
|
||||||
Distributions of capital on equity investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22.5
|
|
|
—
|
|
|
22.5
|
|
||||||
Restricted Cash
|
|
—
|
|
|
—
|
|
|
(3.8
|
)
|
|
—
|
|
|
—
|
|
|
(3.8
|
)
|
||||||
Changes in other assets and liabilities and other
|
|
0.3
|
|
|
—
|
|
|
8.0
|
|
|
(2.2
|
)
|
|
—
|
|
|
6.1
|
|
||||||
Other, principally change in intercompany investing activities
|
|
—
|
|
|
(39.9
|
)
|
|
—
|
|
|
—
|
|
|
39.9
|
|
|
—
|
|
||||||
Net cash used in investing activities
|
|
(26.4
|
)
|
|
(45.1
|
)
|
|
(73.1
|
)
|
|
(3.1
|
)
|
|
39.9
|
|
|
(107.8
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net payments of long-term debt including repurchases of notes
|
|
—
|
|
|
(76.5
|
)
|
|
—
|
|
|
(3.6
|
)
|
|
—
|
|
|
(80.1
|
)
|
||||||
Payments on license obligations
|
|
(15.1
|
)
|
|
—
|
|
|
(9.9
|
)
|
|
—
|
|
|
—
|
|
|
(25.0
|
)
|
||||||
Redemptions of common stock under stock-based compensation plans
|
|
(4.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.4
|
)
|
||||||
Other, principally change in intercompany financing activities
|
|
144.6
|
|
|
—
|
|
|
(25.9
|
)
|
|
(78.8
|
)
|
|
(39.9
|
)
|
|
—
|
|
||||||
Net cash provided by (used in) financing activities
|
|
125.1
|
|
|
(76.5
|
)
|
|
(35.8
|
)
|
|
(82.4
|
)
|
|
(39.9
|
)
|
|
(109.5
|
)
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|
(1.3
|
)
|
|
—
|
|
|
(1.9
|
)
|
||||||
Increase (decrease) in cash and cash equivalents
|
|
(10.8
|
)
|
|
0.5
|
|
|
(4.7
|
)
|
|
(12.3
|
)
|
|
—
|
|
|
(27.3
|
)
|
||||||
Cash and cash equivalents, beginning of period
|
|
43.2
|
|
|
—
|
|
|
4.7
|
|
|
80.8
|
|
|
—
|
|
|
128.7
|
|
||||||
Cash and cash equivalents, end of period
|
|
$
|
32.4
|
|
|
$
|
0.5
|
|
|
$
|
—
|
|
|
$
|
68.5
|
|
|
$
|
—
|
|
|
$
|
101.4
|
|
|
|
Parent
Company |
|
SGI
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminating
Entries |
|
Consolidated
|
||||||||||||
Net cash (used in) provided by operating activities
|
|
$
|
(33.1
|
)
|
|
$
|
(69.4
|
)
|
|
$
|
127.7
|
|
|
$
|
89.2
|
|
|
$
|
—
|
|
|
$
|
114.4
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
|
(8.6
|
)
|
|
(12.4
|
)
|
|
(95.6
|
)
|
|
(26.2
|
)
|
|
—
|
|
|
(142.8
|
)
|
||||||
Distributions of capital on equity investments
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
34.4
|
|
|
—
|
|
|
35.2
|
|
||||||
Changes in other assets and liabilities and other
|
|
—
|
|
|
—
|
|
|
4.0
|
|
|
5.5
|
|
|
—
|
|
|
9.5
|
|
||||||
Other, principally change in intercompany investing activities
|
|
—
|
|
|
114.2
|
|
|
—
|
|
|
—
|
|
|
(114.2
|
)
|
|
—
|
|
||||||
Net cash (used in) provided by investing activities
|
|
(8.6
|
)
|
|
102.6
|
|
|
(91.6
|
)
|
|
13.7
|
|
|
(114.2
|
)
|
|
(98.1
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net payments on long-term debt
|
|
—
|
|
|
(31.5
|
)
|
|
—
|
|
|
(4.7
|
)
|
|
—
|
|
|
(36.2
|
)
|
||||||
Payments on license obligations
|
|
(13.5
|
)
|
|
—
|
|
|
(5.2
|
)
|
|
—
|
|
|
—
|
|
|
(18.7
|
)
|
||||||
Contingent earnout payments
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
||||||
Issuance (redemptions) of common stock under stock-based compensation plans
|
|
0.9
|
|
|
—
|
|
|
(29.6
|
)
|
|
(116.0
|
)
|
|
145.6
|
|
|
0.9
|
|
||||||
Other, principally change in intercompany financing activities
|
|
58.2
|
|
|
—
|
|
|
(12.0
|
)
|
|
(14.8
|
)
|
|
(31.4
|
)
|
|
—
|
|
||||||
Net cash provided by (used in) financing activities
|
|
45.6
|
|
|
(31.5
|
)
|
|
(47.3
|
)
|
|
(135.5
|
)
|
|
114.2
|
|
|
(54.5
|
)
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
|
0.1
|
|
|
(0.4
|
)
|
|
(1.8
|
)
|
|
(2.4
|
)
|
|
—
|
|
|
(4.5
|
)
|
||||||
Increase (decrease) in cash and cash equivalents
|
|
4.0
|
|
|
1.3
|
|
|
(13.0
|
)
|
|
(35.0
|
)
|
|
—
|
|
|
(42.7
|
)
|
||||||
Cash and cash equivalents, beginning of period
|
|
37.9
|
|
|
0.1
|
|
|
28.8
|
|
|
105.0
|
|
|
—
|
|
|
171.8
|
|
||||||
Cash and cash equivalents, end of period
|
|
$
|
41.9
|
|
|
$
|
1.4
|
|
|
$
|
15.8
|
|
|
$
|
70.0
|
|
|
$
|
—
|
|
|
$
|
129.1
|
|
(in millions)
|
|
Three Months Ended
June 30, |
|
Variance
|
|||||||||||
|
|
2016
|
|
2015
|
|
2016 vs. 2015
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
Services
|
|
$
|
363.5
|
|
|
$
|
337.9
|
|
|
$
|
25.6
|
|
|
7.6
|
%
|
Product sales
|
|
214.8
|
|
|
218.1
|
|
|
(3.3
|
)
|
|
(1.5
|
)%
|
|||
Instant games
|
|
150.9
|
|
|
135.5
|
|
|
15.4
|
|
|
11.4
|
%
|
|||
Total revenue
|
|
729.2
|
|
|
691.5
|
|
|
37.7
|
|
|
5.5
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Cost of services
(1)
|
|
101.4
|
|
|
98.6
|
|
|
2.8
|
|
|
2.8
|
%
|
|||
Cost of product sales
(1)
|
|
100.7
|
|
|
107.9
|
|
|
(7.2
|
)
|
|
(6.7
|
)%
|
|||
Cost of instant games
(1)
|
|
74.1
|
|
|
68.8
|
|
|
5.3
|
|
|
7.7
|
%
|
|||
Selling, general and administrative
|
|
144.9
|
|
|
140.9
|
|
|
4.0
|
|
|
2.8
|
%
|
|||
Research and development
|
|
51.7
|
|
|
48.0
|
|
|
3.7
|
|
|
7.7
|
%
|
|||
Employee termination and restructuring
|
|
4.2
|
|
|
5.2
|
|
|
(1.0
|
)
|
|
(19.2
|
)%
|
|||
Depreciation and amortization
|
|
193.1
|
|
|
222.2
|
|
|
(29.1
|
)
|
|
(13.1
|
)%
|
|||
Operating income (loss)
|
|
59.1
|
|
|
(0.1
|
)
|
|
59.2
|
|
|
n/m
|
|
|||
Other (expense) income:
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
|
(165.3
|
)
|
|
(166.4
|
)
|
|
1.1
|
|
|
(0.7
|
)%
|
|||
Earnings from equity investments
|
|
8.0
|
|
|
3.3
|
|
|
4.7
|
|
|
142.4
|
%
|
|||
Gain on early extinguishment of debt
|
|
25.2
|
|
|
—
|
|
|
25.2
|
|
|
n/m
|
|
|||
Other income (expense), net
|
|
1.7
|
|
|
(4.3
|
)
|
|
6.0
|
|
|
139.5
|
%
|
|||
Net loss before income taxes
|
|
(71.3
|
)
|
|
(167.5
|
)
|
|
96.2
|
|
|
(57.4
|
)%
|
|||
Income tax benefit
|
|
19.6
|
|
|
65.3
|
|
|
(45.7
|
)
|
|
(70.0
|
)%
|
|||
Net loss
|
|
$
|
(51.7
|
)
|
|
$
|
(102.2
|
)
|
|
$
|
50.5
|
|
|
(49.4
|
)%
|
(in millions)
|
|
Three Months Ended
June 30, |
|
Variance
|
|||||||||||
|
|
2016
|
|
2015
|
|
2016 vs. 2015
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
Services
|
|
$
|
236.0
|
|
|
$
|
240.4
|
|
|
$
|
(4.4
|
)
|
|
(1.8
|
)%
|
Product sales
|
|
205.9
|
|
|
209.3
|
|
|
(3.4
|
)
|
|
(1.6
|
)%
|
|||
Total revenue
|
|
441.9
|
|
|
449.7
|
|
|
(7.8
|
)
|
|
(1.7
|
)%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Cost of services
(1)
|
|
44.4
|
|
|
53.1
|
|
|
(8.7
|
)
|
|
(16.4
|
)%
|
|||
Cost of product sales
(1)
|
|
93.4
|
|
|
100.9
|
|
|
(7.5
|
)
|
|
(7.4
|
)%
|
|||
Selling, general and administrative
|
|
61.2
|
|
|
71.2
|
|
|
(10.0
|
)
|
|
(14.0
|
)%
|
|||
Research and development
|
|
38.5
|
|
|
41.1
|
|
|
(2.6
|
)
|
|
(6.3
|
)%
|
|||
Employee termination and restructuring
|
|
3.4
|
|
|
2.7
|
|
|
0.7
|
|
|
25.9
|
%
|
|||
Depreciation and amortization
|
|
154.3
|
|
|
181.5
|
|
|
(27.2
|
)
|
|
(15.0
|
)%
|
|||
Operating income
|
|
$
|
46.7
|
|
|
$
|
(0.8
|
)
|
|
$
|
47.5
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
|||||||
Earnings from equity investments
|
|
$
|
1.4
|
|
|
$
|
1.8
|
|
|
$
|
(0.4
|
)
|
|
(22.2
|
)%
|
|
|
Three Months Ended
June 30, |
|
Variance
|
|||||||||||
|
|
2016
|
|
2015
|
|
2016 vs. 2015
|
|||||||||
Key Performance Indicators:
|
|
|
|
|
|
|
|
|
|||||||
WAP, premium and daily-fee Participation units:
|
|
|
|
|
|
|
|
|
|||||||
Installed base at period end
|
|
21,909
|
|
|
22,856
|
|
|
(947
|
)
|
|
(4.1
|
)%
|
|||
Average daily revenue per unit
|
|
$
|
52.85
|
|
|
$
|
56.77
|
|
|
$
|
(3.92
|
)
|
|
(6.9
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Other Participation and leased units:
|
|
|
|
|
|
|
|
|
|||||||
Installed base at period end
|
|
47,857
|
|
|
45,232
|
|
|
2,625
|
|
|
5.8
|
%
|
|||
Average daily revenue per unit
|
|
$
|
15.95
|
|
|
$
|
15.46
|
|
|
$
|
0.49
|
|
|
3.2
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Gaming machine sales:
|
|
|
|
|
|
|
|
|
|||||||
U.S. and Canadian new unit shipments
|
|
4,678
|
|
|
4,001
|
|
|
677
|
|
|
16.9
|
%
|
|||
International new unit shipments
|
|
2,990
|
|
|
2,804
|
|
|
186
|
|
|
6.6
|
%
|
|||
Total new unit shipments
|
|
7,668
|
|
|
6,805
|
|
|
863
|
|
|
12.7
|
%
|
|||
Average sales price per new unit
|
|
$
|
16,859
|
|
|
$
|
16,458
|
|
|
$
|
401
|
|
|
2.4
|
%
|
(in millions)
|
|
Three Months Ended
June 30, |
|
Variance
|
|||||||||||
|
|
2016
|
|
2015
|
|
2016 vs. 2015
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
Services
|
|
$
|
44.1
|
|
|
$
|
45.9
|
|
|
$
|
(1.8
|
)
|
|
(3.9
|
)%
|
Product sales
|
|
8.9
|
|
|
8.8
|
|
|
0.1
|
|
|
1.1
|
%
|
|||
Instant games
|
|
150.9
|
|
|
135.5
|
|
|
15.4
|
|
|
11.4
|
%
|
|||
Total revenue
|
|
203.9
|
|
|
190.2
|
|
|
13.7
|
|
|
7.2
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Cost of services
(1)
|
|
26.8
|
|
|
27.5
|
|
|
(0.7
|
)
|
|
(2.5
|
)%
|
|||
Cost of product sales
(1)
|
|
7.3
|
|
|
7.0
|
|
|
0.3
|
|
|
4.3
|
%
|
|||
Cost of instant games
(1)
|
|
74.1
|
|
|
68.8
|
|
|
5.3
|
|
|
7.7
|
%
|
|||
Selling, general and administrative
|
|
17.8
|
|
|
16.4
|
|
|
1.4
|
|
|
8.5
|
%
|
|||
Research and development
|
|
2.6
|
|
|
1.5
|
|
|
1.1
|
|
|
73.3
|
%
|
|||
Employee termination and restructuring
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
n/m
|
|
|||
Depreciation and amortization
|
|
17.2
|
|
|
20.0
|
|
|
(2.8
|
)
|
|
(14.0
|
)%
|
|||
Operating income
|
|
$
|
57.9
|
|
|
$
|
49.0
|
|
|
$
|
8.9
|
|
|
18.2
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Earnings from equity investments
|
|
$
|
6.6
|
|
|
$
|
1.5
|
|
|
$
|
5.1
|
|
|
340.0
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Key Performance Indicators:
|
|
|
|
|
|
|
|
|
|||||||
Retail sales of instant games of U.S. instant game customers
(2)(3)
|
|
$
|
11,064
|
|
|
$
|
10,625
|
|
|
$
|
439
|
|
|
4.1
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Retail sales of U.S. lottery system customers
(2)(4)
|
|
$
|
2,190
|
|
|
$
|
2,042
|
|
|
$
|
148
|
|
|
7.2
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Italy retail sales of instant games (in Euros)
(2)
|
|
€
|
2,200
|
|
|
€
|
2,217
|
|
|
€
|
(17
|
)
|
|
(0.8
|
)%
|
(in millions)
|
|
Three Months Ended
June 30, |
|
Variance
|
|||||||||||
|
|
2016
|
|
2015
|
|
2016 vs. 2015
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
Services
|
|
$
|
83.4
|
|
|
$
|
51.6
|
|
|
$
|
31.8
|
|
|
61.6
|
%
|
Total revenue
|
|
83.4
|
|
|
51.6
|
|
|
31.8
|
|
|
61.6
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Cost of services
(1)
|
|
30.2
|
|
|
18.0
|
|
|
12.2
|
|
|
67.8
|
%
|
|||
Selling, general and administrative
|
|
26.8
|
|
|
15.2
|
|
|
11.6
|
|
|
76.3
|
%
|
|||
Research and development
|
|
8.4
|
|
|
5.4
|
|
|
3.0
|
|
|
55.6
|
%
|
|||
Employee termination and restructuring
|
|
0.5
|
|
|
0.3
|
|
|
0.2
|
|
|
66.7
|
%
|
|||
Depreciation and amortization
|
|
3.8
|
|
|
5.4
|
|
|
(1.6
|
)
|
|
(29.6
|
)%
|
|||
Operating income
|
|
$
|
13.7
|
|
|
$
|
7.3
|
|
|
$
|
6.4
|
|
|
87.7
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Key Performance Indicators:
|
|
|
|
|
|
|
|
|
|||||||
Social gaming:
|
|
|
|
|
|
|
|
|
|||||||
Average MAU
(2)
|
|
8.0
|
|
|
7.3
|
|
|
0.7
|
|
|
9.6
|
%
|
|||
Average DAU
(3)
|
|
2.4
|
|
|
2.2
|
|
|
0.2
|
|
|
9.1
|
%
|
|||
ARPDAU
(4)
|
|
$
|
0.31
|
|
|
$
|
0.21
|
|
|
$
|
0.10
|
|
|
47.6
|
%
|
(1)
|
Exclusive of D&A.
|
(2)
|
MAU = Monthly Active Users, a count of unique visitors to our sites during a month.
|
(3)
|
DAU = Daily Active Users, a count of unique visitors to our sites during a day.
|
(4)
|
ARPDAU =Average daily revenue per DAU is calculated by dividing revenue for a period by the DAU for the period by the number of days for the period.
|
|
|
|
|
|
|
|
|||||||||
(in millions)
|
|
Six Months Ended June 30,
|
|
Variance
|
|||||||||||
|
|
2016
|
|
2015
|
|
2016 vs. 2015
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
Services
|
|
$
|
713.8
|
|
|
$
|
668.3
|
|
|
$
|
45.5
|
|
|
6.8
|
%
|
Product sales
|
|
412.4
|
|
|
417.5
|
|
|
(5.1
|
)
|
|
(1.2
|
)%
|
|||
Instant games
|
|
285.0
|
|
|
264.4
|
|
|
20.6
|
|
|
7.8
|
%
|
|||
Total revenue
|
|
1,411.2
|
|
|
1,350.2
|
|
|
61.0
|
|
|
4.5
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Cost of services
(1)
|
|
196.3
|
|
|
189.1
|
|
|
7.2
|
|
|
3.8
|
%
|
|||
Cost of product sales
(1)
|
|
195.1
|
|
|
205.8
|
|
|
(10.7
|
)
|
|
(5.2
|
)%
|
|||
Cost of instant games
(1)
|
|
141.1
|
|
|
135.8
|
|
|
5.3
|
|
|
3.9
|
%
|
|||
Selling, general and administrative
|
|
287.2
|
|
|
286.8
|
|
|
0.4
|
|
|
0.1
|
%
|
|||
Research and development
|
|
101.5
|
|
|
94.9
|
|
|
6.6
|
|
|
7.0
|
%
|
|||
Employee termination and restructuring
|
|
6.9
|
|
|
13.4
|
|
|
(6.5
|
)
|
|
(48.5
|
)%
|
|||
Depreciation and amortization
|
|
373.7
|
|
|
406.4
|
|
|
(32.7
|
)
|
|
(8.0
|
)%
|
|||
Operating income
|
|
109.4
|
|
|
18.0
|
|
|
91.4
|
|
|
507.8
|
%
|
|||
Other (expense) income:
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
|
(331.0
|
)
|
|
(330.7
|
)
|
|
(0.3
|
)
|
|
0.1
|
%
|
|||
Earnings from equity investments
|
|
11.2
|
|
|
6.4
|
|
|
4.8
|
|
|
75.0
|
%
|
|||
Gain on early extinguishment of debt
|
|
25.2
|
|
|
—
|
|
|
25.2
|
|
|
n/m
|
|
|||
Other (expense) income, net
|
|
2.4
|
|
|
(9.9
|
)
|
|
12.3
|
|
|
(124.2
|
)%
|
|||
Net loss before income taxes
|
|
(182.8
|
)
|
|
(316.2
|
)
|
|
133.4
|
|
|
(42.2
|
)%
|
|||
Income tax benefit
|
|
38.8
|
|
|
127.6
|
|
|
(88.8
|
)
|
|
(69.6
|
)%
|
|||
Net loss
|
|
$
|
(144.0
|
)
|
|
$
|
(188.6
|
)
|
|
$
|
44.6
|
|
|
(23.6
|
)%
|
(1)
|
Exclusive of D&A.
|
|
|
|
|
|
|
|
|||||||||
(in millions)
|
|
Six Months Ended June 30,
|
|
Variance
|
|||||||||||
|
|
2016
|
|
2015
|
|
2016 vs. 2015
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
Services
|
|
$
|
468.6
|
|
|
$
|
478.3
|
|
|
$
|
(9.7
|
)
|
|
(2.0
|
)%
|
Product sales
|
|
395.0
|
|
|
397.2
|
|
|
(2.2
|
)
|
|
(0.6
|
)%
|
|||
Total revenue
|
|
863.6
|
|
|
875.5
|
|
|
(11.9
|
)
|
|
(1.4
|
)%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Cost of services
(1)
|
|
85.6
|
|
|
98.6
|
|
|
(13.0
|
)
|
|
(13.2
|
)%
|
|||
Cost of product sales
(1)
|
|
181.2
|
|
|
188.7
|
|
|
(7.5
|
)
|
|
(4.0
|
)%
|
|||
Selling, general and administrative
|
|
129.1
|
|
|
145.4
|
|
|
(16.3
|
)
|
|
(11.2
|
)%
|
|||
Research and development
|
|
76.7
|
|
|
80.9
|
|
|
(4.2
|
)
|
|
(5.2
|
)%
|
|||
Employee termination and restructuring
|
|
5.0
|
|
|
6.9
|
|
|
(1.9
|
)
|
|
(27.5
|
)%
|
|||
Depreciation and amortization
|
|
295.9
|
|
|
324.8
|
|
|
(28.9
|
)
|
|
(8.9
|
)%
|
|||
Operating income
|
|
$
|
90.1
|
|
|
$
|
30.2
|
|
|
$
|
59.9
|
|
|
198.3
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Earnings from equity investments
|
|
$
|
1.4
|
|
|
$
|
1.7
|
|
|
$
|
(0.3
|
)
|
|
(17.6
|
)%
|
|
|
|
|
|
|
|
|||||||||
(in millions)
|
|
Six Months Ended June 30,
|
|
Variance
|
|||||||||||
|
|
2016
|
|
2015
|
|
2016 vs. 2015
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
Services
|
|
$
|
89.2
|
|
|
$
|
91.5
|
|
|
$
|
(2.3
|
)
|
|
(2.5
|
)%
|
Product sales
|
|
17.4
|
|
|
20.3
|
|
|
(2.9
|
)
|
|
(14.3
|
)%
|
|||
Instant games
|
|
285.0
|
|
|
264.4
|
|
|
20.6
|
|
|
7.8
|
%
|
|||
Total revenue
|
|
391.6
|
|
|
376.2
|
|
|
15.4
|
|
|
4.1
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Cost of services
(1)
|
|
54.9
|
|
|
55.9
|
|
|
(1.0
|
)
|
|
(1.8
|
)%
|
|||
Cost of product sales
(1)
|
|
13.9
|
|
|
17.1
|
|
|
(3.2
|
)
|
|
(18.7
|
)%
|
|||
Cost of instant games
(1)
|
|
141.1
|
|
|
135.8
|
|
|
5.3
|
|
|
3.9
|
%
|
|||
Selling, general and administrative
|
|
34.3
|
|
|
33.5
|
|
|
0.8
|
|
|
2.4
|
%
|
|||
Research and development
|
|
5.2
|
|
|
3.1
|
|
|
2.1
|
|
|
67.7
|
%
|
|||
Employee termination and restructuring
|
|
1.3
|
|
|
0.2
|
|
|
1.1
|
|
|
550.0
|
%
|
|||
Depreciation and amortization
|
|
35.0
|
|
|
41.3
|
|
|
(6.3
|
)
|
|
(15.3
|
)%
|
|||
Operating income
|
|
$
|
105.9
|
|
|
$
|
89.3
|
|
|
$
|
16.6
|
|
|
18.6
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Earnings from equity investments
|
|
$
|
9.8
|
|
|
$
|
4.7
|
|
|
$
|
5.1
|
|
|
108.5
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Key Performance Indicators:
|
|
|
|
|
|
|
|
|
|||||||
Retail sales of instant games of U.S. instant game customers
(2)(3)
|
|
$
|
22,395
|
|
|
$
|
21,098
|
|
|
$
|
1,297
|
|
|
6.1
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Retail sales of U.S. lottery system customers
(2)(4)
|
|
$
|
4,484
|
|
|
$
|
4,115
|
|
|
$
|
369
|
|
|
9.0
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Italy retail sales of instant games (in Euros)
(2)
|
|
€
|
4,555
|
|
|
€
|
4,519
|
|
|
€
|
36
|
|
|
0.8
|
%
|
|
|
|
|
|
|
|
|||||||||
(in millions)
|
|
Six Months Ended June 30,
|
|
Variance
|
|||||||||||
|
|
2016
|
|
2015
|
|
2016 vs. 2015
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
Services
|
|
$
|
156.0
|
|
|
$
|
98.5
|
|
|
$
|
57.5
|
|
|
58.4
|
%
|
Total revenue
|
|
156.0
|
|
|
98.5
|
|
|
57.5
|
|
|
58.4
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Cost of services
(1)
|
|
55.8
|
|
|
34.6
|
|
|
21.2
|
|
|
61.3
|
%
|
|||
Selling, general and administrative
|
|
51.3
|
|
|
30.3
|
|
|
21.0
|
|
|
69.3
|
%
|
|||
Research and development
|
|
15.7
|
|
|
10.9
|
|
|
4.8
|
|
|
44.0
|
%
|
|||
Employee termination and restructuring
|
|
0.5
|
|
|
1.0
|
|
|
(0.5
|
)
|
|
(50.0
|
)%
|
|||
Depreciation and amortization
|
|
7.5
|
|
|
10.5
|
|
|
(3.0
|
)
|
|
(28.6
|
)%
|
|||
Operating income
|
|
$
|
25.2
|
|
|
$
|
11.2
|
|
|
$
|
14.0
|
|
|
125.0
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Key Performance Indicators:
|
|
|
|
|
|
|
|
|
|||||||
Social gaming:
|
|
|
|
|
|
|
|
|
|||||||
Average MAU
(2)
|
|
9.1
|
|
|
7.5
|
|
|
1.6
|
|
|
21.3
|
%
|
|||
Average DAU
(3)
|
|
2.5
|
|
|
2.2
|
|
|
0.3
|
|
|
13.6
|
%
|
|||
ARPDAU
(4)
|
|
$
|
0.29
|
|
|
$
|
0.20
|
|
|
$
|
0.09
|
|
|
45.0
|
%
|
(1)
|
Exclusive of D&A.
|
(2)
|
MAU = Monthly Active Users, a count of unique visitors to our sites during a month.
|
(3)
|
DAU = Daily Active Users, a count of unique visitors to our sites during a day.
|
(4)
|
ARPDAU =Average daily revenue per DAU is calculated by dividing revenue for a period by the DAU for the period by the number of days for the period.
|
|
|
Six Months Ended June 30,
|
|
Variance
|
||||||||
|
|
2016
|
|
2015
|
|
2016 vs. 2015
|
||||||
Net cash provided by operating activities
|
|
$
|
191.9
|
|
|
$
|
114.4
|
|
|
$
|
77.5
|
|
Net cash used in investing activities
|
|
(107.8
|
)
|
|
(98.1
|
)
|
|
(9.7
|
)
|
|||
Net cash used in financing activities
|
|
(109.5
|
)
|
|
(54.5
|
)
|
|
(55.0
|
)
|
|||
Effect of exchange rates on cash and cash equivalents
|
|
(1.9
|
)
|
|
(4.5
|
)
|
|
2.6
|
|
|||
Decrease in cash and cash equivalents
|
|
$
|
(27.3
|
)
|
|
$
|
(42.7
|
)
|
|
$
|
15.4
|
|
Exhibit
Number
|
|
Description
|
31.1
|
|
Certification of the Chief Executive Officer of the Company pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (†)
|
|
|
|
31.2
|
|
Certification of the Chief Financial Officer of the Company pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (†)
|
|
|
|
32.1
|
|
Certification of the Chief Executive Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (†)
|
|
|
|
32.2
|
|
Certification of the Chief Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (†)
|
|
|
|
99.1
|
|
Terms and Conditions of Equity Awards to Key Employees under the Scientific Games Corporation 2003 Incentive Compensation Plan.*(†)
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
101.DEF
|
|
XBRL Taxonomy Definition Label Linkbase
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
SCIENTIFIC GAMES CORPORATION
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Michael A. Quartieri
|
|
|
Name:
|
Michael A. Quartieri
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jeffrey B. Johnson
|
|
|
Name:
|
Jeffrey B. Johnson
|
|
|
Title:
|
Vice President, Finance, and Chief Accounting Officer
|
|
|
|
|
|
|
|
|
Dated:
|
August 4, 2016
|
|
|
/s/ M. Gavin Isaacs
|
M. Gavin Isaacs
|
Chief Executive Officer
|
/s/ Michael A. Quartieri
|
Michael A. Quartieri
|
Chief Financial Officer
|
|
/s/ M. Gavin Isaacs
|
|
M. Gavin Isaacs
|
|
Chief Executive Officer
|
|
August 4, 2016
|
|
/s/ Michael A. Quartieri
|
|
Michael A. Quartieri
|
|
Chief Financial Officer
|
|
August 4, 2016
|